In today's Freedom Friday blog and email newsletter, I want to talk about a topic that often comes up with my construction clients, and that's something along the lines of “What's an M&M lien?” or “How can I resolve a construction dispute with a lien?” or something similar along those lines.  Given that the construction industry is a top industry for the firm, in today's Freedom Friday blog and email newsletter, I'm answering the question, “What are the basics of construction liens in 2025?”

Before I can answer that question, I need to answer a different question, and that's “Why are liens even necessary?”  Too many prospective clients have come to me asking how they can get paid when they didn't file a lien in a timely manner.  There are three (3) different types of disputes between a general contractor and a subcontractor: payment issues, quality of work, and delays.  Payment issues are the most common and include late payments, partial payments, and other disagreements over the amount owed.  Quality of work can also be an issue leading to a dispute, if it is alleged that the completed work does not live up to agreed-to standards or other specifications.  Work quality issues can also include use of lower quality materials or poor workmanship.  Delays can be an issue and those can be caused by scheduling conflicts, supply chain issues, weather conditions, and unforeseen worksite conditions.  These types of disputes are also preventable by fostering good relationships and clear communication between the general contractor and subcontractors, having a business attorney review the construction contracts involved, and also drafting a well-written construction contract.  Of course, disputes can still occur, even with a well-written construction contract.

There are also certain ways that you can resolve these disputes short of litigation.  The first way you can resolve a construction dispute is to send a demand letter, even written by the aggrieved party, or by a business attorney.  A demand letter provides written notice to the other party outlining specific issues, such as unpaid invoices or other contract breaches, and demanding payment or other action by a deadline.  At the same time, if you have not done so already, you also may need to file a statutory Pre-Lien Notice, which is required before filing an M&M lien.  M&M lien stands for mechanics' and materialmen's lien, which is a common lien in Oklahoma.  The Pre-Lien Notice must be sent via Certified Mail to both the general contractor (if applicable) and the owner of the property where the work was performed, or materials were supplied.  Before you file a lawsuit, you also must perfect your lien status, because you must foreclose on your lien (through filing suit) within one (1) year of filing your M&M lien.

So, what is an M&M lien?  An M&M lien is a lien filed against private property for the purpose of securing payment for work performed or materials supplied in the context of a construction project (this can be residential, commercial, multi-family, etc.).  Before you file your lien, you must issue a Pre-Lien Notice within 75 days of the last day that work was performed, or materials supplied to the job site.  The Pre-Lien Notice must be sent to both the owner of the property and the original contractor.  The deadline to file a lien statement is then 90 days after the last day of work or materials supplied for subcontractors, and all other liens must be filed within four (4) months of the last day of work or materials supplied for the project.

If you are a property owner facing an M&M lien, these liens are usually resolved through one of a variety of methods.   First, you may be able to negotiate with the lienholder through a settlement.  This can lead to the lien being released once the payment terms are met.  However, the lienholder can sue to foreclose on the lien, and if the lienholder obtains a judgment, the lienholder can sell the property (at sheriff's sale) to satisfy the lien.  Usually avoiding a foreclosure suit is better for all the parties involved, especially if there are multiple liens on the property.  Lastly, in some cases, a bond can be set up in lieu of the lien, and this usually involves the court holding the funds while the dispute is resolved, especially if the dispute involves work quality issues or other construction defects beyond mere payment issues or ordinary delays.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.